If you plan to enhance your income-earning potential or want to train for a new occupation, the Canadian government allows you to withdraw (tax-free) a maximum of $20,000 from your RRSP to finance full-time training or education for you or your spouse/common-law partner. You can withdraw up to $10,000 per calendar year, until January of the fourth calendar year, after the year you made your first Lifelong Learning Plan withdrawal. The money must be repaid to your RRSP, usually in yearly installments of 1/10 of the total amount you withdrew.

For more details and to see if you qualify for the LLP, visit cra-arc.gc.ca.

If you are buying or building a qualifying first home, the Canadian government allows you and your spouse to withdraw (tax-free) up to $25,000 per person from your RRSP(s) to buy or build your first home. Under the Home Buyers’ Plan, you have 15 years to repay the money to your RRSP starting the second year, after the year you withdraw funds.

Learn more about RRSP withdrawals and see if you qualify for HBP, at cra-arc.gc.ca.

Like all Canadian financial institutions, Zag Bank is required to issue a T5 Statement of Investment Income slip on your behalf each year – that is, if the interest earned by an investment (e.g. your Zag GIC) is greater than $50. Keep in mind that, even if it is less than $50, you must still report this interest on your annual income tax return.

For more information, please check with Canada Revenue Agency (CRA) at cra-arc.gc.ca.

Zag Bank is required to provide tax slips to Canadian residents who have received or earned interest of $50 or more in any given year.

This also applies to longer term GICs (over 1 year) where you have chosen to have your interest paid out at maturity. During the term, your GIC is still earning interest which is credited to your GIC (but not paid-out) every year on your anniversary. If the interest earned is $50 or more in the calendar year, it will be reported on a T5 tax receipt.

You will not receive a tax slip if the interest earned on your Zag accounts is less than $50. This applies to non-registered Zag savings accounts and non-registered Zag GICs. However, you must still report the interest income to Canada Revenue Agency.

We recommend that you consult a tax advisor for reporting in your particular circumstance. Generally, each spouse reports their share of the interest from the joint investment based on how much each contributed when they bought the GIC.